In Striking Shift, Small Investors Flee Stock Market

In Striking Shift, Small Investors Flee Stock Market

www.nytimes.com

Renewed economic uncertainty is testing Americans’ generation-long love affair with the stock market.

Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment Company Institute, the mutual fund industry trade group. Now many are choosing investments they deem safer, like bonds.

If that pace continues, more money will be pulled out of these mutual funds in 2010 than in any year since the 1980s, with the exception of 2008, when the global financial crisis peaked.

Small investors are “lo

(visit the link for the full news article)

About a week ago there was an interesting, and related, thread on the "Hindenburg Omen," a possible harbinger of a stock market crash.

Hindenburg thread

The New York Times is not predicting anything so dire, but it appears that America's appetite for the stock market has declined markedly since the onset of this recession/depression.

I'm very conservative financially, so I'm inclined to put more money in bonds, as these investors seem to be doing.

www.nytimes.com
(visit the link for the full news article)

[edit on 22-8-2010 by Sestias]

reply to post by Sestias


If I'm honest - this says more about the wider education and knowledge of just how dangerous it is to invest privately in private entities that you have no control over.

With so many private organisations going pop, due to mismanagement, malmanagement and of course market conditions, it's no wonder that investor confidence is in the basement.

I think the phenomenon of private investing is going to be down and out for a decade. Therefore, we will experience a decade long liquidity issue. This issue will cause discipline in the market place that is ripe for further entrenchment of the corporatocracy. Small business will not be financed, competition will not be able to happen.

If it's a master plan, it's a damn good one.

Parallex.

I think more small investors are wising up.
They are being used just like they were
sitting in a gambling casino. The HOUSE
always wins !!!

i think the withdrawing from mutual funds is related to the same increase in the withdrawls from the 401k funds...
it's all about making ends meet, with available cash

the idea that the many unemployed, under employed are cashing out of stocks because the big players control the markets...
might have a little truth in it
but to the economists & trend spotters, its all about families & individuals trying to continue their vanishing lifestyle that is causing many to withdraw from their IRAs and 401Ks



here's a twist for some of you that want to stay marginally invested in stocks, but not have to buy stocks in lots of 100 shares---or pay a broker outrageous fees to buy shares for you...

begin a couple of Company sponsered DRIPs ~ (Dividend ReInvestment Plans)...i have 13 active accounts, i only invest in the Inc. that are undervalued...& just let the expensive ones ride until i find it worthwhile to invest in again...(the dividends continue accumulating + the rate is more than the 2 or 5 year Treasury are right now.)

costs/fees vary from 0$ (for 11 of my accounts)
to an outrageous fee of $10. plus .03 cents a share for Motorola(MOT)
and similar for Reynolds America Inc (RAI)

DRIPs imply long term confidence in the economy. A better idea would be to hedge your portfolio or to go out and out short on the market when conditions warrant it. See the link for the specific short ETFs.

seekingalpha.com...

UltraShort ProShares ETFs: 24 Ways to Benefit From Going Short

"If you think the stock market is going down, you have a few options. You can short stocks or Exchange Traded Funds [ETFs], you can buy put options, or the latest alternative, UltraShort ProShares Exchange Traded Funds [ETFs] which attempt to track twice the inverse of the daily performance of various indices. Many investors don't like shorting stocks or ETFs due to the unlimited risk and the dividend costs. In addition, some investors don't like put options because of the premium and the time limits."

Kinda old news. They've been leaving the stock market for MONTHS now.

The level at which people are leaving it now is as fast as April 2009... post all time lows... of March 2009.

People knows the economy is not recovering and they don't believe the BS.